The Slow Death of Australian House Prices
The rate cuts in November and then December were supposed to save Australian house prices.
Yet less than six months later, recent economic data suggest things are getting worse.
Aren't banks there claiming they are having funding problems? (Evidence of which is reportedly scarce, but nonetheless, it would explain the lack of stimulative response in the market.)
But ever the optimist, RP Data called this decline in April a ‘renewed softness’.
According to the RP Data Report transactions are steady at 31,000 a month, but that is down from 45,000 in 2009. Correspondingly, inventory is high, 2x what it was in 2007. Now, population grows about 1.4% per year, so over a little of that is natural growth. But the upswing in hopeful sellers from the GFC never quite got out of the market, and now we have another upswing in hopefuls for the market to try and digest.
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| Via MoneyMorning.com.au |
Quick back of the envelope MOI would be just under 10 months of inventory (MOI), a highly contractive number. (Balance is considered to be 6.5 or so.)
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